Intel Corp (INTC)

[DewDiligence]

TMTA’s gross margin in 3Q02 was 38% (2449/6443) on a GAAP basis and 18% (1147/6443) on a pro-forma basis. (Note that TMTA’s financial release includes two separate income statements – one for GAAP and one for pro-forma, which was the one you referenced. The GAAP cost-of- goods figure is lower than the pro-forma figure because some of the inventory sold during the quarter was previously written down according to GAAP rules.)

The only reason I used a 22% gross margin in my earlier example was that you had mentioned 22% in your message. As I’ve already said, TMTA has given guidance for a 40% gross margin for 2H03. Whether they get there remains to be seen, of course, but 40% seems to me to be an achievable number. Regards, Dew